Being a Landlord In Ireland, is what many people are considering given the level of rents at the moment. It is always better to buy if you can, even though supply remains a constant issue.
Just remember that Rental Income means: The Profit on the Rent after paying expenses!
What Tax Does a Landlord in Ireland Pay?
In Ireland, rental income is subject to income tax. The rate of income tax that applies to every Landlord In Ireland on their rental income depends on your total taxable income and your tax residency status.
If you are tax resident in Ireland, the rates of income tax for 2023 are as follows:
20% on income up to €35,300
40% on income between €35,301 and €70,600
45% on income above €70,600
In addition to income tax, you may also be liable for Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) on your rental income. The rates of USC and PRSI vary depending on your income levels and circumstances.
It’s important to note that there are certain deductions and allowances that may apply to rental income, such as mortgage interest relief and expenses incurred in relation to the rental property. It is advisable to consult with a tax professional or the Revenue Commissioners to ensure you are aware of all the relevant tax obligations and entitlements related to rental income in Ireland.
Non Resident Landlords have a different System
Non-resident landlords in Ireland are subject to a different tax treatment compared to resident landlords.
They must appoint an agent in Ireland to act on their behalf. The agent is responsible for ensuring the non-resident landlord complies with their tax obligations.
- The agent must deduct tax from the rental income at the standard rate of tax, which is currently 20%, before remitting the net amount to the non-resident landlord.
- The agent is then responsible for making periodic income tax returns to the Revenue Commissioners on behalf of the non-resident landlord.
Non-resident landlords should seek professional tax advice to ensure they understand and comply with their specific tax obligations in Ireland.
Records to Keep
Landlords in Ireland are required to keep accurate and organized records for tax purposes. These records should reflect the income and expenses related to their rental properties. Here are some of the key records that landlords should keep:
- Rental Income: Keep records of all rental income received, including details of the tenant(s), dates of rental payments, and amounts received.
- Expenses:
- mortgage interest,
- property maintenance and repairs,
- insurance,
- management fees,
- advertising costs, and any other relevant expenses.
Retain receipts and invoices to support these expenses, and even consider using our Quickbooks System
Property Purchase and Sale: Get the closing statement and signed contract from your solicitor.
- Rental Agreements: Keep copies of rental agreements or leases with tenants, outlining rental terms and conditions.
- Bank Statements: Retain copies of bank statements showing rental income received and related expenses paid.
- Property Expenses: Maintain records of property tax payments, local authority charges, and any other relevant property-related expenses.
- Mortgage Documentation: Keep records of mortgage statements and documents showing interest paid on the mortgage loans used to purchase the rental property.
- Repairs and Maintenance: Retain records of repairs and maintenance work carried out on the property, including receipts, invoices, and contracts with service providers.
- Agent Fees: Keep records of any fees paid to property management companies or agents for their services.
Non-Resident Documentation: If you are a non-resident landlord, keep records of your registration with the Revenue Commissioners, your appointed agent, and any other relevant documentation related to your non-resident status.
These records should be retained for a minimum of six years from the end of the tax year to which they relate. It is advisable to consult with a tax professional or the Revenue Commissioners to ensure you are compliant with all record-keeping requirements for landlords in Ireland.
